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Edward E. Leamer

Edward E. Leamer is Chauncey J. Medberry Professor of Management, Professor of Economics, and Professor of Statistics at the University of California, Los Angeles. He is the author Macroeconomic Patterns and Stories and other books.

Titles by This Author

Lessons from the Heckscher-Ohlin Framework

In this spirited and provocative book, Edward Leamer turns an examination of the Heckscher–Ohlin framework for global competition into an opportunity to consider the craft of economics: what economists do, what they should do, and what they shouldn’t do. Claiming “a lifetime relationship with Heckscher–Ohlin,” Leamer argues that Bertil Ohlin’s original idea offered something useful though vague and not necessarily valid; the economists who later translated his ideas into mathematical theorems offered something precise and valid but not necessarily useful. He argues further that the best economists keep formal and informal thinking in balance. An Ohlinesque mostly prose style can let in faulty thinking and fuzzy communication; a mostly math style allows misplaced emphasis and opaque communication. Leamer writes that today’s model- and math-driven economics needs more prose and less math.

Leamer shows that the Heckscher–Ohlin framework is still useful, and that there is still much work to be done with it. But he issues a caveat about economists: “What we do is not science, it’s fiction and journalism.” Economic theory, he writes, is fiction (stories, loosely connected to the facts); data analysis is journalism (facts, loosely connected to the stories). Rather than titling the two sections of his book Theory and Evidence, he calls them Economic Fiction and Econometric Journalism, explaining, “If you find that startling, that’s good. I am trying to keep you awake.”

Theory and Evidence

This is the first book to present a clear empirical picture of the international exchange of goods and of the resources that account for the exchanges that occur. Using tables, graphs, and econometric data summaries, it describes the patterns of trade and the patterns of resource supplies of fifty-nine countries and explains these trade patterns in terms of the abundance of eleven resources.

The author's scientific goal is to leave the reader with a clear impression of the empirical validity of a central result of trade theory—the Heckscher-Ohlin theory of international comparative advantage, in which a country's factor endowments (land, labor, capital) play a crucial role in determining trade patterns. The theory is fully articulated and carefully linked to the empirical analysis. The econometric methods and the results should create a standard by which other data analyses will be judged in the future.

Chapters cover theories of international trade, testing the theories of international comparative advantage, formation of the trade aggregates, data preview, econometric methods, estimates of the trade dependence model, and counterfactuals. Appendixes present the effects of factor market distortions, statistics, and detailed discussions of the statistical results.